KUALA LUMPUR (April 29): OpenSys (M) Bhd, which makes automated teller machines, expects a revenue boost from an estimated 3,000 units of cash machines due for replacement in the next three years.

The typical life span of self-service cash machines is around seven years, OpenSys said in its annual report, and the company has supplied more than 5,000 units of the so-called cash recycling machines (CRMs) to its banking customers since mass deployment in 2016.

“Besides wear and tear, the CRMs need to be replaced because of technology obsolescence,” OpenSys said. Apart from dispensing cash, CRMs also accept cash and are designed to re-use the deposited cash for subsequent withdrawal transactions.

In addition, OpenSys also expects more pilot projects of the sidecar modules for the CRMs designed to take cheque deposits and to dispense cards in 2024. The company is “optimistic that CRM sidecar modules will supplement the group’s hardware segment revenue moving forward”, it noted.

In addition to cash machines, OpenSys is also banking on the teller cash recyclers (TCRs) that count, sort and store bank notes as a potential new revenue stream.

OpenSys said it is implementing the so-called SmartTCR for four banks as proof-of-concept with more product pilots slated for implementation this year. The company estimates market potential for SmartTCR at between 4,000 and 6,000 units, catering to over 2,000 bank branches in Malaysia.

“The group’s revenue diversification strategies are developing steadily and are expected to make a higher contribution to the group’s revenue and profit moving forward,” OpenSys added.

Apart from machines that handle cash, OpenSys also manufactures cheque deposit machines and self-service bill payment kiosks. Sales of hardware made up 23% of its revenue last year while software and services formed the bulk of its revenue.

The company made a net profit of RM12.38 million, or 2.76 sen per share, on revenue of RM88.38 million in 2023.

OpenSys shares closed half a sen higher at 38 sen on Monday, giving the group a market capitalisation of RM170 million. The stock has gained five sen or 15.15% over the past one year.